Charity Commission
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Mariam appeal inquiry results
UNDER STRICT EMBARGO UNTIL 00:01 BST FRIDAY 8 JUNE 2007
The Mariam Appeal received significant donations connected with improper transactions made under the oil-for-food programme, a Charity Commission inquiry reported today. In accepting these funds, the Commission found the trustees were not sufficiently vigilant and did not properly discharge their legal duties regarding these donations.
The Mariam Appeal was founded in 1998 to provide medicines, medical equipment and medical assistance to the people of Iraq and to arrange for the medical treatment of Iraqi children outside Iraq.
The inquiry, opened in December 2005, sought to ascertain whether funds resulting from contracts made under the UN oil-for-food programme were donated to the Appeal; if so, to establish what was the legal status of those funds; and to examine the extent to which the trustees of the Appeal properly discharged their duties and responsibilities in receiving those funds.
The charity trustees knew about the sanctions placed on Iraq and the UN oil-for-food programme. Given the complex setting within which the Mariam Appeal had to work, the Commission's view is that the trustees should have been extremely vigilant in their acceptance of these donations. The trustees did not make sufficient enquiries as to the source of the donations, or assess whether it was proper and in the interests of the appeal to accept them.
The Appeal is not on the central register of charities, has not operated since early 2003, has no active trustees and holds no assets requiring the protection of the Commission. Overall, the Commission is satisfied that the funds received by the charity were spent on the charity's humanitarian purpose. In these circumstances, the regulatory action the Commission has taken is the publication of its findings.
It is important that all charities, and particularly those working in difficult economic and political environments, ensure that they follow a robust policy for scrutinising the source of significant donations.
Three of the former trustees of the Mariam Appeal who responded to the Commission's questions deny any wrong-doing.
Ends
Notes to Editors
1. The Charity Commission is the independent regulator for charitable activity in England and Wales. A copy of the full inquiry report can be found on our website http://www.charitycommission.gov.uk .
2. This press statement quotes sequentially from paragraphs 47, 43, 46, 2, 15, 43, 49, 4 and 38 of the inquiry report.
3. The trustees of the Appeal who were known to the Commission were Mr George Galloway MP, Mr Fawaz Zureikat, Dr Aminah Abu-Zayyad (also referred to at the time as Mrs Galloway), Mr Sabah Al-Muktar, and Mr Stuart Halford.
4. Mr Fawaz Zureikat and Dr Aminah Abu-Zayyad provided no response to any communication from the Charity Commission.
5. The Commission has undertaken two previous formal inquiries under section 8 of the Charities Act 1993. The first two inquiries established that the Mariam Appeal was charitable by law and should have registered with the Commission. They also established that, overall, funds received by the charity were spent on the charity's humanitarian purpose.
6. The oil-for-food programme for Iraq was established by the UN and ran from December 1996-March 2003 to enable Iraq to sell its oil to the world market in the period of sanctions. The rules of the programme required that oil sale proceeds be paid into a UN controlled account. The funds in this account were made available to the then Iraqi Government to be used only for humanitarian aid and other purposes permitted by the Security Council.
7. In October 2005 reports were published by the Independent Inquiry Committee appointed by the UN ('the IIC') and the U.S Senate Committee on Homeland Security and Governmental Affairs - Permanent Sub-committee on Investigations (the 'PSI') on the oil-for-food programme. The reports concluded that, amongst other matters, certain allocations of contracts in the programme had involved the payment of "illegal surcharges" to the then Iraqi Government. Commissions earned by certain individuals (including in this case Mr Zureikat) on the sale of the oil were connected to these contracts. As donations to the appeal were made from commissions derived from the programme, the Commission has concluded that these donations came from improper sources.
